All eyes were on South Korea this week, as the long-awaited meeting between Presidents Trump and Xi finally took place at the APEC Summit on Wednesday. Naturally, Trump hailed the roundtable as a “12 out of 10” success, with China agreeing to roll back some of its rare earth export controls for one year and committing to several years of US soybean purchases in exchange for lower punitive tariffs related to fentanyl (though the agreement still leaves the all-in China tariff at close to 50%). Both leaders were all smiles after the event, but major questions including access to leading edge chips and the long-term path of rare earth production remained unanswered. Behind the scenes, both countries seem to be escalating moves to shore up their strategic positions, and we continue to keep our eyes on what this might mean for US fiscal and monetary policy heading into 2026 (assuming the federal government ever reopens). Fed Chairman Jerome Powell gave the market a bit of a surprise on that front as he suggested at this week’s FOMC meeting that another Fed Funds rate cut in December is far from a foregone conclusion, but with the central bank officially planning an end to Quantitative Tightening, a new (Trump-friendly) Fed Chair set to step up in roughly 6 months, banking system reserves getting tight, and more industrial policy deals stacking up every week on an increasingly fractured geopolitical game board, we still think the zoomed-out trajectory over the next 12-24 months looks fairly clear.

...read more at ten31timestamp.com